10 Stories That Shaped Tech Policy in 2013

The issues that stir the growing army of tech-sector lobbyists and trade groups in Washington aren't generally front-page news in the mainstream press. But two of the biggest stories of 2013 -- arguably the biggest, at least of the second half of the year -- had technology stamped all over them.

Then there were a litany of other more industry-specific issues that came up for debate in 2013 that, though of a lower profile than the NSA revelations and the government healthcare website, were nonetheless of great concern to technology firms and their policy advocates. Here's a look back at some of the headline tech policy issues that played out over the past year.

NSA Surveillance

The fallout from Edward Snowden's disclosures about the U.S. government's secret intelligence gathering made the former NSA contractor a leading contender for Time's person of the year. That honorific went to Pope Francis, but it's hard to overstate the import of the Snowden leaks, particularly in the tech world.

The drumbeat of revelations about the NSA's activities began in June, stoking concerns about the role of communications providers and Internet companies in providing customer data to the government. Google, Microsoft, Facebook and others have tried mightily to debunk the notion that government spies had a direct pipeline into their servers, collecting data about their customers at will. They are suing to gain authorization to publish more information about the data requests they receive from the government, and have been vocal in their calls for more checks on the government's intelligence-gathering activities.

Most recently, in mid-December, top executives from Facebook, Yahoo, Google and other tech firms met with President Obama at the White House to discuss the intelligence programs. Few details about the substance of the discussion emerged, though participants described the mutual feeling that all sides needed to rebuild trust with the American public. The same week, the recommendations of a review board that Obama appointed to review the NSA's activities were published, and the president vowed that reforms would be forthcoming.

"I'm going to make a pretty definitive statement about all of this in January," Obama said in a news conference before leaving for holiday vacation in Hawaii.

HealthCare.gov

The rollout of the federal healthcare website designed as the hub for Americans to shop for insurance plans has been described as many things -- "rocky," "disastrous," "botched" and all manner of other unflattering characterizations.

When the site went live in October, visitors found it slow to load, pages timed out, and applications could not be completed. Temporarily overshadowed by the government shutdown, the problems with the site quickly took center stage in Congress, where Obama's opponents took a particular delight in grilling administration officials about what went wrong, and when Americans could expect the site to work.

Obama and Health and Human Services Secretary Kathleen Sebelius repeatedly acknowledged the failure and vowed that it would get better, and soon. Obama said he was commissioning a "tech surge," and the administration summoned industry experts to Washington to help fix the site.

At year-end, HealthCare.gov had improved considerably. More than 1 million people have successfully signed up for new insurance plans, administration officials have said. In December, the White House brought in former Microsoft executive Kurt DelBene to run the website. But the site remains a work in progress. To some in the tech sector, the rollout came as the latest reminder that the government too often takes a fundamentally flawed approach to IT projects -- namely, going for the big score, when a more iterative, piecemeal cadence would yield better results.

"I don't think there's a lesson here that we haven't already learned more than once," says Doug Bourgeois, vice president of solutions and services with VMware's U.S. public sector division. "The big bang approach never worked, and yet here we are again with the big bang approach."

Patent Reform

Patent litigation is one of the costs of doing business in the tech sector. But the price tag has risen considerably in recent years, driven in great measure by frivolous litigation brought by so-called patent assertion entities -- often dubbed patent trolls -- that hold patents for the sole purpose of suing for infringement, many tech firms and trade groups have said.

Their complaints found a receptive audience in Congress. In early December, the House of Representatives approved legislation that would seek to cut down on the lawsuits brought by patent trolls by an overwhelming vote. Technology and retail trade groups, along with some digital rights advocates, hailed the passage of the Innovation Act, which would require plaintiffs to disclose the specific patents they are asserting up front and pay defendants' court fees if they lose the case, among other provisions.

The bill, which has drawn sharp criticism from groups representing inventors, university researchers and others, awaits action in Senate.

The Role of the Federal CIO

The federal government continued to press ahead with a number of sweeping IT initiatives over the past year. None drew the splashy headlines of the healthcare website, but departments and agencies, at varying pace, advanced plans to shift systems to the cloud, consolidate data centers and mobilize the workforce, to name a few. But the figures at the center of those rollouts -- the agency CIOs -- continued to operate with limited authority over budgeting, acquisitions and personnel.

The CIO of the federal government, Steve VanRoekel, along with many who hold that position at the agency level, made the case for granting CIOs more centralized authority and eliminating CIO positions at the subagency and bureau level. The House passed a bill to that end in June as part of legislation to fund the Pentagon, but the measure was left out of the final bill the Senate approved, leaving the question of federal CIO authority to return in the next congressional session.

Online Sales Taxes

Some tech policy issues are perennial entries on lists such as this one -- the subjects of persistent debate that never seem to come to resolution. The question of whether and how to collect sales taxes on Internet purchases is certainly in that category. As a starting point, it's important to note that the debate is not about whether to create a new tax.

Shoppers who live in states with a sales tax are supposed to report their online purchases on their annual return, tallying up the taxes that are due but weren't collected at the time of the sale. Most people do not. So states have complained that billions of dollars in revenue that is owed goes uncollected each year, and some have been trying to force out-of-state ecommerce vendors like Amazon to collect and remit the taxes.

But the U.S. Supreme has ruled that merchants must have a physical presence in a state before they can be compelled to collect taxes there, though the court acknowledged Congress could change that condition with a new law.

In May, the Senate approved the Marketplace Fairness Act, which would grant states the taxing authority, provided they took steps to simplify their state and local codes to ease the burden for retailers. The bill also contains an exemption for small sellers. But that's where the issue ended, at least in 2013. The chairman of the House Judiciary Committee, Virginia Republican Bob Goodlatte, responded to the passage of the Senate bill with a statement saying that the legislation needs to be further simplified and its terms clarified, adding that his committee would consider alternative measures.

Then in December, the Supreme Court declined to hear an appeal of a lower court's ruling that rejected the challenge brought by Amazon and Overstock.com against a New York law that deemed affiliates of the retailers sufficient to constitute the physical presence that would trigger the sales tax requirement. The high court's refusal to hear the case means that it will be up to Congress -- and Congress alone -- to move the online sales tax issue forward.

Can the Feds Regulate Broadband?

The authority of the Federal Communications Commission to police broadband Internet service providers remained an unsettled question at the end of the year. Two opposing sides made their case in a federal appellate court in September, with a ruling expected in 2014.

At issue is the substance of the FCC's 2010 open Internet order, which barred ISPs from blocking or slowing lawful Internet transmissions. But more broadly, the lawsuit, brought by Verizon, stands as a challenge to the FCC's authority to regulate broadband providers. At the oral arguments in September, the judges seemed skeptical of the agency's statutory mandate in that area.

Oral arguments are only one piece of the evidence the court will review in an extremely complicated case, but some observers believe that the judges tipped their hand at that proceeding, and expect a ruling to strike portions of the FCC's order, but not overturn the whole thing, in effect limiting -- but not nullifying -- the FCC's jurisdiction in regulating ISPs.

"In effect, we believe the panel intends to use a scalpel to cut out the most market-significant open Internet restrictions, not take a chainsaw to the FCC's rules and broadband authority," says Stifel analyst Christopher King.

Mobile Broadband

Since the early days of the Obama administration, the FCC has identified mobile broadband as a top policy priority. To ensure that wireless carriers have the capacity to support the surge in data traffic on their networks driven by the proliferation of smartphones and tablets, the commission has determined that it needs to free up more spectrum to expand mobile bandwidth.

The commission had initially planned to move ahead with the next major step in that effort -- a set of auctions that would reallocate spectrum from broadcasters to mobile broadband providers -- next year. But 2013 was a year of transition at the FCC, with Chairman Julius Genachowski leaving the commission in May, replaced by an interim chair before the confirmation of Tom Wheeler to head the agency in November. About a month into his tenure, Wheeler announced that he was pushing back the auction initiative, anticipating the issuance of the order outlining the details of the process next year, with the auctions to be held mid-2015.

Mobile Devices, Unlocked and Ready for Takeoff

As the FCC works to expand wireless capacity on the backend, 2013 saw policy shifts in Washington that came in response to Americans' increasing reliance on their mobile devices. Early in the year, a petition on the White House website in support of permitting users to unlock their phones garnered the 100,000 signatures needed to prompt an official response. To the delight of the petitioners and consumer-advocacy groups, the White House responded that, yes, consumers should have that right. The FCC got on board, and in December, CTIA, the leading wireless trade group, announced that the major mobile carriers had agreed to a set of principles codifying the right, under certain conditions, to unlock mobile devices and to make that process more transparent.

Separately, the FCC advanced a plan that would permit airlines to relax their ban on using phones during flights to talk, text, email and surf the Web. The FCC's role in that process is technical in nature, and its proposed rulemaking suggests that the use of mobile devices in some conditions would not interfere with the aircraft's communications systems. At the same time, the Department of Transportation has indicated that will seek a prohibition on in-flight voice calls in response to the "concerns raised by airlines, travelers, flight attendants, members of Congress and others who are all troubled over the idea of passengers talking on cell phones in flight."

In late June, the Senate approved a comprehensive bill that would have increased the H-1B cap, but the issue has languished in the Republican-controlled House. Some observers hold out hope that House leaders might take up immigration reform in 2014, though many in the conservative wing of the GOP are strongly opposed to provisions creating a pathway to citizenship. On that issue the Republicans are split, creating a dilemma for party leaders in an election year. But with the budget deal reached in late December, lawmakers will be free from some (though not all) of the deadline-driven fights over fiscal issues, potentially clearing the way for movement on other domestic issues.

Cybersecurity

Cybersecurity, like online sales taxes, is an enduring issue on the congressional tech policy agenda, but after another year of hearings debating the subject, 2013 ends with no significant new security laws on the books, leaving legislative measures to improve the sharing of threat information between the public and private sectors or strengthen the government's role in safeguarding critical infrastructure for a later date.

That inaction comes amid a widespread acknowledgement among policy makers and industry leaders that the breadth and sophistication of the threats continue to grow. The administration received something of a wake-up call in November, however, when a presidential advisory committee delivered its review of the government's cybersecurity posture. That report found that the "federal government rarely follows accepted best practices," recommending that agencies phase out antiquated technology, streamline regulations improve the process of sharing threat information, among other proposals.

"Cybersecurity will not be achieved by a collection of static precautions that, if taken by government and industry organizations, will make them secure," the committee concluded. "Rather, it requires a set of processes that continuously couple information about an evolving threat to defensive reactions and responses."

Kenneth Corbin is a Washington, D.C.-based writer who covers government and regulatory issues for CIO.com.

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